Making Sense of the Environment: The Role of Perceived Effectiveness

Abstract

This manuscript develops and explores two ideas: (1) that perceptions of environmental uncertainty are after-the-fact rationalizations used by decision makers to explain strong or weak effectiveness assessments, and (2) that different contexts motivate different sense-making outcomes. The findings, based on a sample of senior decision makers from 34 firms in two industries, suggest that assessments of effectiveness and perceptions of environmental uncertainty are related through decision makers' sense-making efforts. The manuscript also addresses the limitations and implications of these results.